Consumer internet businesses are redefining how people engage with the world by giving them instant connectivity and convenience. This influence cuts both ways though because they have high exposure to the ups and downs of consumer spending, and uncertainty surrounding this factor has muted returns - over the past six months, the industry was flat while the S&P 500 climbed by 9.9%.

A cautious approach is imperative when dabbling in this space as competition is fierce and not all companies are created equal. Taking that into account, here are three internet stocks that may face trouble.

eBay (EBAY)

Market Cap: $39.37 billion

Originally known as the first online auction site, eBay (NASDAQ: EBAY) is one of the world’s largest online marketplaces.

Why Do We Think Twice About EBAY?

1. Active Buyers have stagnated over the last two years, indicating its platform may be struggling to differentiate itself from competitors
2. Estimated sales growth of 6.5% for the next 12 months is soft and implies weaker demand
3. Expenses have increased as a percentage of revenue over the last few years as its EBITDA margin fell by 3.5 percentage points

At $86.52 per share, eBay trades at 12.5x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than EBAY.

Shutterstock (SSTK)

Market Cap: $678.3 million

Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.

Why Are We Hesitant About SSTK?

1. Focus on expanding its platform came at the expense of monetization as its average revenue per request fell by 18.6% annually
2. Sales are projected to tank by 1% over the next 12 months as demand evaporates
3. Performance over the past three years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue

Shutterstock is trading at $18.87 per share, or 3.1x forward EV/EBITDA. Check out our free in-depth research report to learn more about why SSTK doesn’t pass our bar.

LegalZoom (LZ)

Market Cap: $1.76 billion

Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ: LZ) offers online legal services and documentation assistance for individuals and businesses.

Why Does LZ Give Us Pause?

1. Annual revenue growth of 5.7% over the last three years was below our standards for the consumer internet sector
2. Decision to emphasize platform growth over monetization has contributed to sluggish trends in its average revenue per user
3. Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas

LegalZoom’s stock price of $9.93 implies a valuation ratio of 8.6x forward EV/EBITDA. Read our free research report to see why you should think twice about including LZ in your portfolio.

Stocks We Like More

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